Couple regain home after foreclosure

April 4, 2013

Updated Aug. 21, 2013 1:17 p.m.

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Sue and Keith Robishaw's Tustin home was foreclosed and sold to an investor while the pair were in the process of seeking a loan modification. The couple fought the foreclosure and the bank rescinded it. Now the Robishaws have their home back, but they're still seeking the loan mod. "It's been so long, it feels like our life has been on hold," Sue Robishaw says. H. LORREN AU JR., ORANGE COUNTY REGISTER

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Longtime Tustin residents Keith and Sue Robishaw's home was foreclosed and sold to an investor while the pair were in the process of seeking a loan modification. The couple made a formal request for the bank to review their case, and the foreclosure was rescinded. They are hopeful they now will get the loan mod. H. LORREN AU JR., ORANGE COUNTY REGISTER

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Ernie Ching, Sue and Keith Robishaw's attorney, helped them get their home back after it was foreclosed. They filed a formal request with the bank to review the case and rescind the foreclosure. H. LORREN AU JR., ORANGE COUNTY REGISTER

Sue and Keith Robishaw's Tustin home was foreclosed and sold to an investor while the pair were in the process of seeking a loan modification. The couple fought the foreclosure and the bank rescinded it. Now the Robishaws have their home back, but they're still seeking the loan mod. "It's been so long, it feels like our life has been on hold," Sue Robishaw says.H. LORREN AU JR., ORANGE COUNTY REGISTER

Wells Fargo erroneously foreclosed on the home of a Tustin couple – while the pair was seeking a loan modification – and has canceled the sale of the house to an investor, the Register has learned.

The foreclosure occurred in November, just one month after major U.S. banks agreed to restrict the practice of "dual tracking," or seizing a residence while a homeowner is working with the bank to modify a loan. The dual-tracking restriction was part of the National Mortgage Settlement, an agreement between federal officials and major banks following accusations of foreclosure abuses by lenders.

Sue and Keith Robishaw ran into financial trouble in 2009, after Keith lost his job, and sought a loan modification. They said the process was long and repetitive, but they complied with every request from the bank. The Register wrote about their case in December, after the house was foreclosed while the Robishaws were away visiting family for Thanksgiving.

The couple asked Wells Fargo to conduct a formal review of the case and cancel the foreclosure. While the Robishaws waited, they refused to move out – even though the home had been purchased by an investor at the foreclosure auction. Last month, the couple fought off eviction – down to the last minute, with Sue Robishaw making frantic phone calls as a sheriff's deputy cooled his heels on her doorstep.

The Robishaws prevailed. The sale of the house to the investor has been canceled, attorneys in the case said this week. The formal notice of rescission, dated March 21, said the foreclosure was the result of "inadvertence and error."

The Robishaws and their lawyer, Ernie Ching, said they did not know what Wells Fargo paid the investor, if anything, to cancel the sale. Neither a Wells Fargo spokeswoman nor the investor, GRE Development Inc., would comment this week. An attorney for the bank, Natalie T. Nguyen, would confirm only that the foreclosure was rescinded.

REVERSING A FORECLOSURE

Rescissions do not occur often, foreclosure experts say.

"It has been my experience that rescissions are still very rare," said Pat Pinto, manager of the foreclosure mitigation unit of the Legal Aid Society of Orange County. Before the National Mortgage Settlement, she added, "Servicers/lenders who foreclosed and took back a property refused to rescind a sale even though they were aware there was a problem with the foreclosure."

Rescinding a foreclosure is "extremely uncommon," said Kurt De Meire, CEO of County Records Research, a trustee that processes foreclosures and publishes daily foreclosure data. His firm was not the trustee in the Robishaw case.

Banks "are supposed to do their reviews and get clearances before it sold," he said. "They go through a lot before they clear us to sell a property."

Sean O'Toole, CEO of Foreclosure Radar, a firm that helps investors buy properties, said he's seen rescissions under a variety of circumstances, "but as a percentage of total (foreclosure) sales, it would be small."

The rescission reinstates the mortgage. The couple is now working with Wells Fargo to get a loan modification – which is what they were in the midst of doing when the house was foreclosed.

The Robishaws are relieved to have their home back. But life isn't back to normal.

"Through this whole process, I have been cautious," Sue Robishaw said this week. "Until I have a signed, final mortgage and I'm making the payments, I'm not finished."

THE DUAL-TRACKING PROBLEM

In February 2012, 49 state attorneys general reached a $25 billion settlement in a lawsuit accusing lenders of abusive mortgage servicing and foreclosure practices. As part of the settlement, approved by a federal judge, lenders agreed to restrict dual tracking – seizing a home while struggling owners arestill in the process of negotiating with a bank. The restriction went into effect in October – one month before the Robishaws' house was foreclosed.

"I can't envision a more classic example of dual-tracking," Ching, the couple's lawyer, said in an interview last year. "Ignoring the Robishaws' timely trial payments and good-faith efforts to enter into an affordable loan modification, Wells Fargo foreclosed without notice."

Lisa Woolery, a spokeswoman for Wells Fargo, declined to discuss the foreclosure at the time.

On Wednesday, Woolery said, "We have been working with the Robishaws for more than three years to provide options to allow them to retain their home and a rescission sale of the property is in progress."

Dual tracking remains an ongoing problem, according to Joseph Smith Jr., a veteran in the banking industry and the monitor in charge of overseeing the implementation of the national mortgage settlement between the federal government and Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial.

A survey of 84 housing counselors and lawyers released Wednesday by the California Reinvestment Coalition, an advocacy group, showed a majority of the respondents said that the largest mortgage servicers continue to engage in dual tracking.

Smith said he would work with lenders and borrowers to "remediate" any cases not handled properly. He asked that homeowners report any violations of the settlement on his website, mortgageoversight.com.

Laura Brewer, a spokeswoman for Smith's office, said Wednesday that the monitor did not have any data available on foreclosure rescissions.

'DEPLETED ALL OUR SAVINGS'

The Robishaws have lived in their Tustin home for more than 15 years. Sue Robishaw is a bookkeeper. Keith Robishaw is a project manager for an architectural firm.

The couple took out several loans since they purchased the home in 1997 for $255,000 and got a mortgage for $242,250. County records show that between 2003 and 2005, they refinanced their mortgage twice – once for $356,250 and the second time for $434,000 – and took out two home equity lines of credit.

The Robishaws said they used the money to buy cars, make repairs and pay taxes, as well as remodel the house.

Then the recession hit. Keith Robishaw was laid off in April 2009 and remained out of work for 21/2 years.

The couple made a full monthly payment of $2,992.63 in March 2010. They said they struggled to make additional payments when they could and repeatedly tried to get the mortgage modified through Wells Fargo and the Home Affordable Modification Program, the government program to help mortgage holders lower their payments. The bank made many requests for documentation, asking for the same materials over and over, Sue Robishaw said.

At one point, the couple wrote in a letter to the bank, "We have taken full distribution of both our Wells Fargo IRAs and depleted all our savings in trying to make ends meet."

Keith Robishaw eventually got his job back. In early November, a bank employee told the couple the house was no longer in "active" foreclosure status, Ching said in his letter to the bank requesting the formal rescission review.

But somehow the foreclosure had been reactivated. ForeclosureRadar.com, which tracks foreclosures, showed that an investor bought the home at the auction on Nov. 28 for $484,850.

DOWN TO THE WIRE

As the bank conducted its formal review of the foreclosure, the future began to look better for the Robishaws. The bank's lawyer checked on whether the couple could afford the home if granted a loan modification. In February, she sent the Robishaws a preliminary analysis with some tentative payment numbers that looked affordable.

But the home still was owned by the investor, and a separate eviction process was under way in Orange County Superior Court. In February, a notice was posted on the Robishaws' door. The couple was told to pack their belongings and have everything out of the house by March 6, Sue Robishaw said. On that day, an official told her, she and her husband would be leaving with only what they could carry.

On March 6, a sheriff's deputy arrived. The house was still full of furniture.

"He said, 'I'm here for the eviction. What are we doing?' Sue Robishaw said. Her response: "Well, we're staying."

She nervously threw out phone calls until word came from the investor's lawyer. The eviction notice had been canceled, Sue Robishaw said, on that very day.

The Robishaws have some advice for homeowners who are in the same situation they were in. Put everything in writing. Keep all paperwork. And get a lawyer to help you.

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